US House lawmakers introduce bill to limit criminal liability for blockchain developers

JH Kim

Summary

US House lawmakers reportedly jointly introduced the “Blockchain Development Act,” which would exclude blockchain software developers from criminal prosecution.
The bill reportedly clarifies who is subject to Section 1960, the federal criminal provision on “unlicensed money transmitting businesses,” addressing controversies from the Tornado Cash and Samourai Wallet cases.
By specifying that software development and code distribution alone are not subject to criminal penalties, it was said the legal uncertainty facing open-source developers and infrastructure builders could be eased.

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On the 26th (local time), Crypto in America host Eleanor Terrett said on X (formerly Twitter) that US House lawmakers Scott Fitzgerald, Ben Cline and Zoe Lofgren jointly introduced the “Blockchain Development Act,” which would explicitly exclude blockchain software developers from criminal prosecution.

The core of the bill is to clarify the scope of Section 1960, the federal criminal provision governing “unlicensed money transmitting businesses.” The provision was originally designed to regulate custodial operators that hold and manage customers’ funds.

However, in the Tornado Cash and Samourai Wallet cases, the provision was applied even to software developers who did not directly control users’ funds, emerging as a key point of contention between the crypto industry and regulators.

The bill states in law that merely developing software or distributing code cannot, by itself, be grounds for criminal penalties. The industry expects that, if passed, the legislation could substantially reduce legal uncertainty for open-source developers and infrastructure builders.